Casino developer, rep hope House blocks compact

Monday

Sep 16, 2013 at 12:01 AMSep 16, 2013 at 4:13 PM

With a committee vote clearing the path for legislative debate on a second gaming compact between the state and the Mashpee Wampanoag Tribe, some in the southeastern region of Massachusetts are calling for lawmakers to reject the accord needed for the tribe’s Taunton casino bid.

Andy Metzger

With a committee vote clearing the path for legislative debate on a second gaming compact between the state and the Mashpee Wampanoag Tribe, some in the southeastern region of Massachusetts are calling for lawmakers to reject the accord needed for the tribe’s Taunton casino bid.

After a hearing in Springfield Tuesday, the Committee on Economic Development and Emerging Technologies approved a gaming compact between the Mashpee tribe and Gov. Deval Patrick. The vote frees the bill to move to the House for a vote although House leaders haven’t said when that will occur.
Stalled in committee since April, the compact’s advancement is drawing some howls of protest.

“The Governor has placed the interests of one group ahead of the interests of the rest of southeast Massachusetts’ men and women,” KG Urban Enterprises Managing Director Andrew Stern, who is competing for the state’s lone casino license in the region, said in a statement. “That’s just wrong. We hope sincerely that the legislature is wiser than the Governor on this issue and does not approve the compact.”

The Legislature last year approved a compact between the state and the tribe, but it was rejected by the U.S. Department of the Interior, which said the state offered concessions outside the compact’s purview.

The new compact includes a sliding scale to determine how much the Mashpee tribe pays the state, granting 21 percent if no other casinos open in Massachusetts, 17 percent if a casino opens in one of the other regions, an additional 2 percent reduction if a slots parlor opens in the southeast, and zero if another casino opens in the region, a possibility since gaming regulators have opened the region to applicants.

Last July a casino compact resolve, which did not include a scenario where the tribe would pay nothing, passed 120-32.
On Tuesday, the town of Plainville, which is located in the eastern Massachusetts region, approved a ballot referendum to bring a slots parlor operated by Penn National Gaming to the Plainridge Racetrack.

Rep. Robert Koczera, a New Bedford Democrat, said advancing the tribe’s gaming compact will further delay the establishment of a casino in the southeast, and said unless Congress changes the law, the Mashpee will not succeed in federal approval for land-in-trust, another necessary step before the tribe can build the First Light casino in a Taunton office park.

“The compact is inoperable if the land is not taken into trust, and the likelihood of the land being taken into trust is remote at best,” Koczera told the News Service. He said, “I’m going to stand on the floor of the House against the compact as not being something that we have to do at this time.”

KG Urban is hoping to develop an old power plant alongside the fishing piers of New Bedford Harbor into a resort casino, and has sued the state, arguing the 2011 gaming law’s carve-out for a tribal casino is unconstitutional.

The Mashpee met the law’s roughly half-year deadline for holding a non-binding ballot referendum, which Taunton voters approved, and obtaining a gaming compact with the state.
After the federal government rejected the first gaming compact, Patrick and the tribe negotiated a second iteration, filing it with the Legislature for ratification on March 28. The Gaming Commission opened up the region to commercial casino developers April 18.

“Although it took longer than anticipated, it’s good to see this agreement be reported out of committee with overwhelming support, which also is a hopeful sign for the future of gaming in Southeastern Massachusetts,” Sen. Marc Pacheco, a Taunton Democrat, said in a statement. He said, “I am cautiously optimistic that the House and Senate, which will now review the agreement, will recognize its importance to the region, and allow the compact to move through the legislative process at the state level to allow its final analysis and approval at the federal level.”

Koczera said he is not partial to KG Urban’s plans in his city, and said that applicants who are unsuccessful in casino or slots applications elsewhere in the state might try for the commercial license available in the southeast, mentioning land in Bridgewater, as well as Plainridge and the former dog track in Raynham, both of which are vying for the state’s lone slots license.

According to a Gaming Commission official, applicants in the eastern and western regions can propose a project in the southeast without reapplying for the phase one application, which mainly judges applicants on their background and finances.

The logistics of switching to the southeast could depend on when the Gaming Commission selects licensees in the other two regions and how that matches up with the deadline for phase two applications, when a developer will need to have secured a host community agreement and local voters’ approval.

“Some of them will bid in Region C to have a second bite of the apple so to speak,” Koczera said.

Before stepping in at Plainridge, Penn National had sought to build a casino in Springfield, though City Hall elected to negotiate with MGM Resorts, and tried for a slots parlor in Tewksbury, an idea squelched by Town Meeting in that community.

New Bedford Mayor Jonathan Mitchell, who has backed a marine infrastructure project not far from the proposed casino site, has not embraced KG Urban, Koczera said.

“They have a location in the city. The mayor has put cold water on it. He’s been critical of it, I think, to his detriment,” said Koczera, who said any casino in the region would provide valuable jobs for cities where the unemployment rate is in the double digits and roughly twice the state’s overall rate.

The Mashpee have presented the compact as a document that protects the state’s interests as much as the tribe’s, saying when and if the federal government grants the tribe land in trust, federal law allows the sovereign tribe to build a casino even without a license from the Gaming Commission.

Under the compact, if the Gaming Commission grants a license to a commercial developer and the tribe later builds its own casino, the state-licensed casino would pay 25 percent of its revenue to the state while the Mashpee would pay nothing.

“A commercial casino licensed by the Gaming Commission by late 2014 will pay 25 percent of its gross revenue to the Commonwealth immediately, create 3000 jobs for the building trades and, within 24 months of licensure create up to 7000 direct and indirect jobs across the southeast region, a region in which the two largest cities struggle with double-digit unemployment,” Stern said in his statement. He said, “This compact, however, that Governor Patrick has pushed the legislature to endorse, would offer the Mashpee a no-tax casino should a commercial applicant receive its license from the Commission and make the decision to invest more than $500mm in the southeast.”

A person representing KG Urban said the developer would submit an application by the Sept. 30 deadline for the region.